It’s no secret that the People’s Republic of China poses an enormous challenge for proprietors of software and other intellectual property. The Business Software Alliance estimates that some 90 percent of the software running on Chinese computers is being used illegally, resulting in losses to U.S. companies that some calculate annually run into the billions. And although the Chinese government keeps saying it will address the problem, its own offices have yet to fully cease unauthorized use of copyrighted software.
For more than a decade and a half, Washington has pushed Beijing to enact better policies and practices for IP protection. In the early 1990s, the administration of George Bush Sr. joined IP protection to nuclear nonproliferation and human rights as the three keys to improving U.S.-China relations. The Clinton administration threatened to impose what then would have been the largest trade sanctions in history if China did not improve its performance, and the current Bush administration has made enforcement of IP rights a key element in former U.S. Trade Representative Rob Portman’s well-crafted “Top to Bottom Review” of the United States’ China policy. But so far, neither threats, negotiations nor charm have had their desired effect, and IP theft, software piracy and misuse continue.
The Reality on Chinese Ground
One reason for this lack of success is that all these approaches are predicated on the idea that the issue is basically one of will—that if the Chinese authorities wanted to do something about it, they could. The Chinese government’s will certainly is a part of the larger picture. The development of special intellectual property chambers in Chinese courts—staffed by some of the nation’s best-qualified jurists and lauded by the International Intellectual Property Alliance—is indicative of what can happen when the will to change is present. And the difficulties that General Motors Daewoo faced with the unauthorized copying of its automobiles by a major factory in Anhui province said to have links to Chinese government officials sadly affirm what happens when it isn’t.
And yet, will is not enough. Lying at the heart of the problem is the even more daunting challenge of China’s history and institutions. To take note of these realities is not to apologize for IP infringement but, on the contrary, a way to begin to understand what lies at the heart of the problem.
The Chinese Perspective
History does matter. As I discuss in my book To Steal a Book Is an Elegant Offense (parts of which have recently been used without attribution or authorization by a Chinese professor of intellectual property law!), there was nothing comparable to our idea of intellectual property protection in China prior to its introduction by the West in the early 20th century. The emperors who ruled China prior to the 20th century were, indeed, concerned about unauthorized publication—but solely for the purpose of controlling what was disseminated, not for promoting private, individual expression.
Western ideas of intellectual property were introduced in the early 20th century but, unfortunately, this was too often done via threats, and to protect Western economic interests. The consequence was that many Chinese came to understand the concept of intellectual property as a foreign imposition. Furthermore, the chaos that characterized the first half of the 20th century and the impact of Marxist theories of collective ownership that marked the next three decades meant it was not until the 1980s that we saw the introduction of modern notions of intellectual property in China. Even now, for many Chinese citizens, these remain novel and alien ideas.
To this intellectual mix, we need to add the nature of today’s Chinese institutions. Because China is not democratic, we assume that its leaders can exert their will as they wish. In reality, their efforts fall well short of what they would like, even in areas about which they care deeply (such as controlling the Internet) because coercion, ultimately, is no substitute for effective institutions running on their own and enjoying popular support. Indeed, it’s hard to think of an area of Chinese law today that routinely operates as intended. The problems of insufficient legal consciousness and expertise, local favoritism and corruption that aggravate enforcement of intellectual property rights also crop up across the board in Chinese legal affairs.
What We Need to Do
If we want to create a better climate for intellectual property protection in China, we need to do what we can to promote better and broader public understanding of these rights and help build better institutions. This means working to educate people not only about IP but about rights—both human and economic—in general, for it is unrealistic to expect that a people will pay attention to the complex abstract rights of foreigners if they are not accustomed to asserting their own.
This also means that there ought to be more support—from our government and from private sources alike—for programs that foster the development of legal institutions and the growth of civil society. Contrary to the conventional wisdom, a greater attention on the part of the business community to issues of human rights is likely to advance, rather than impede, the realization of economic objectives in China, such as greater protection for IP rights.
The foundational reasoning for this is the proposition that there is a far closer correlation between a strong civil society and strong IP protection than there is between a strong state and strong IP protection. Put differently, intellectual property protection flourishes in states that nurture free expression and free association. This ought not be surprising when you think that in such states citizens have more private expression and other private interests to protect, have a greater consciousness of their own rights, are better able to band together to protect their interests and have more in the way of rights-protecting institutions on which to call.
There are no quick or easy fixes to the problem of IP infringement in China, but that doesn’t mean we should despair, or that the die is irrevocably cast. As the Confucian classics suggest, understanding the true nature of a problem is the first step toward its resolution.